Hong warns Ukraine war may have significant impact on economy

Finance Minister Hong Nam-ki said Thursday the ongoing crisis surrounding Ukraine is forecast to have significant impact on the Korean economy, vowing to seek every policy means to overcome the difficulties.

The government has been closely monitoring Russia's recent military operations against Ukraine, as it has joined the U.S.-led global efforts to impose sanctions on Russia.

"Russia's invasion of Ukraine has had negative fallout on global supply chains and financial and real economy sectors, and chances are that such impacts will deepen," Hong said during a committee meeting meant to boost competitiveness of the country's parts, materials and equipment segments.

Korea has made all-out efforts to minimize the impacts by taking measures that include securing additional stocks of raw materials such as neon and krypton, Hong said, as the country depends heavily on Russia and Ukraine for their import.

Korea relies on overseas supplies for most of its energy needs.

The minister also vowed to continue to seek comprehensive measures to better support the key sectors on their production and trade based upon experiences of overcoming Japan's export curbs and the urea supply crisis.

Korea suffered a shortage of urea solution, a key fluid used in diesel vehicles to cut emissions, late last year following China's export curbs.

In July 2019, Japan imposed export controls on chemicals vital to the Korean chip industry in apparent retaliation against 2018 South Korean Supreme Court rulings ordering Japanese firms to compensate Korean victims of forced labor during Japan's 1910-45 colonial rule of the Korean Peninsula.

During Thursday's meeting, the government announced its plan to invest 2.3 trillion won ($1.91 billion) in research and development projects in new industry fields this year, including bio and energy.

Previously, the government's drive to nurture materials, parts and equipment mainly focused on flagship industries, such as semiconductors and displays, but it has decided to expand the scope to secure key technologies in a wider range of sectors.

Yonhap